Agile differs from waterfall development, where a project begins with a set of application requirements and proceeds in sequence through a number of stages, such as design, implementation and testing. Instead, agile developers seek to create iterations of a project at regular intervals, thereby allowing better fine-tuning of requirements and more input along the way from end-users and other participants.

SAP decided that its cloud development teams needed a special new workspace, one that reflects agile development's principles of adaptation, close collaboration and flexibility. The result was a 42,000-square-foot facility on SAP's Palo Alto, California, campus that opened this week.

"Cloud services development is almost exclusively agile these days," said IDC analyst Al Hilwa via email. "Traditional software vendors who are adding cloud services are investing heavily in agile as a result, and this building is a good indication of how serious SAP is about cloud."

All of the new building's furniture is on wheels and the walls are "writable," making it possible to quickly realign rooms for meetings and team spaces, according to SAP.

There are no cubicles or corner offices and the overall design emphasizes windows, natural light and a general sense of "transparency," SAP said in a statement.

The setup is also meant to accommodate various workers' personal styles and habits; introverts can find their privacy when they like, while those more prone to seek out collaborators have that option, according to the vendor.

Mike Tschudy , vice president of cloud product design, was deeply involved with the building's conception. He came to SAP from EBay and also did stints at Apple and WebMD.

Early reviews are positive, according to Tschudy, who recalled a telling remark one SAP employee made about the new facility: "This is the first time I've felt like I work in Silicon Valley."

While the facilities design approach and agile development practices are "propagating" across SAP little by little, the company recognizes they're not a fit for all tastes in the company, Tschudy said.

The push toward agile development for SAP's cloud software stems back to the tenure of former executive John Wookey, who arrived in 2008 to oversee development of applications for large companies. Wookey left SAP last year and recently took a job at Salesforce.com.

Meanwhile, SAP recently purchased cloud software vendor SuccessFactors for US$3.4 billion, a move that gave it a sizable customer base as well as additional know-how about how to run such businesses.

SuccessFactors CEO Lars Dalgaard will be in charge of SAP's overall cloud strategy, the details of which are expected to be spelled out at next month's Sapphire show.